TOLEDO, Ohio — With hundreds of thousands of people still burdened with student loan debt, we found that many parents aren't ready for the cost of sending their kids to college.
And with most fall terms having already started and with The US Board of Education announcing it's final extension of the student loan repayment freeze, through January 31st of 2022, there's no better time to learn about the true financial burden of student debt.
Rita Assaf, Vice President of Retirement and College Leadership with Fidelity Investments, says many students - and their parents - don't really know the true price tag of college.
"About 25 percent of parents and a third of high school students say they think a year of college will cost them five thousand dollars or less. That's below the national average, and just to put it in context, one year of in-state college costs about $26,000," Assaf said.
So, for parents, where is this disconnect coming from?
"They're benchmarking against when they went to school. What we're saying is 'take the time now to look at what the costs are through free tools and calculators that are out there, so you can plan ahead'," said Assaf.
The college price tag has skyrocketed in recent years, outpacing American inflation. Because of this, Assaf says parents and their children entering college should take time to understand the real cost, potentially avoiding any unnecessary or risky financial decisions.
"The start of the school year is a great time for families to sit down and have a conversation, to understand what college costs you might have and then put a plan in place to best afford the cost," said Assaf.
It may be intimidating to financially prepare your child for their next steps, but there might be one less reason to worry. Fidelity's research shows the current generation of high school students are concerned about the cost of college more than ever.
"The study found sixty percent of high school students say the pandemic has reshaped their view of college, these students have seen other generations struggle with student debt and forty percent of them actually rated cost as the most important factor," Assaf explained.
While paying for higher education is never easy, just a little bit of research can help you and your family plan for this large financial decision.